UAL Corporation, through its subsidiary, United Air Lines, Inc. (United), provides transportation of persons, property, and mail throughout the U.S. and abroad. United provides these services through full-sized jet aircraft, as well as smaller aircraft in its regional operations conducted under contract by United Express carriers.
United operates as a major passenger airlines with approximately 3,600 flights a day to approximately 200 destinations through its mainline and United Express services. United offers approximately 1,550 average daily mainline, including Ted departures to approximately 120 destinations in 30 countries and two U.S. territories, including the Washington Dulles-Rome service. United provides regional service, connecting primarily through United’s domestic hubs, through marketing relationships with United Express carriers, which provide approximately 2,050 average daily departures to approximately 160 destinations. United serves major market either directly or through its participation in the Star Alliance.
Segments
The company operates its businesses through two segments: Mainline and United Express.
Mainline
As of December 31, 2006, mainline domestic operations served 85 destinations primarily throughout the U.S. and Canada and operated hubs in Chicago, Denver, Los Angeles, San Francisco and Washington, D.C. Mainline international operations serve the Pacific, Atlantic, and Latin America regions. The Pacific region includes nonstop service to Beijing, Hong Kong, Nagoya, Osaka, Seoul, Shanghai, Sydney and Tokyo; direct service to Bangkok, Seoul, Singapore and Taipei through its Tokyo hub; direct service to Ho Chi Minh City and Singapore through Hong Kong, and to Melbourne via Sydney. The Atlantic region includes nonstop service to Amsterdam, Brussels, Frankfurt, London, Munich, Paris and Zurich. In 2006, United commenced service from Washington Dulles to Kuwait City as part of the Atlantic region. United also provides seasonal service to Bermuda. The Latin American region offers nonstop service to Buenos Aires and Sao Paulo and direct service to Montevideo (via Buenos Aires) and Rio de Janeiro (via Sao Paulo). The Latin American region also serves various Mexico destinations, including Cancun, Mexico City, Puerto Vallarta, San Jose del Cabo, and Ixtapa/Zihuatanejo (seasonal); various Caribbean points including Aruba and seasonal service to Montego Bay, Nassau, Punta Cana, and St. Maarten; and Central America including Guatemala City, San Salvador and Liberia, Costa Rica (seasonal).
As of December 31, 2006, the mainline segment operated 460 aircraft and produced approximately 143 billion available seat miles (ASMs) and 117 billion revenue passenger miles (RPMs).
United Express
United has contractual relationships with various regional carriers to provide regional jet and turboprop service branded as United Express. United Express is an extension of the United mainline network (United, Ted and p.s.). SkyWest Airlines, Mesa Airlines, Colgan Airlines, Chautauqua Airlines, Shuttle America, Trans States Airlines and GoJet Airlines are all United Express carriers, most of which operate under capacity purchase agreements.
Under these agreements, United pays the regional carriers contractually-agreed fees (carrier-controlled costs) for operating these flights plus a variable reimbursement (incentive payment) based on agreed performance metrics. The company also has limited prorate agreements with SkyWest Airlines and Colgan Airlines. As of December 31, 2006, United Express carriers operated 290 aircraft and produced approximately 16 billion ASMs and 12 billion RPMs.
Ted: The company has 56 A320 aircraft are configured for Ted service. Ted provides service from United’s hubs in Denver, Washington Dulles, Chicago O’Hare International Airport (O’Hare), Los Angeles and San Francisco to destinations in Arizona, California, Florida, Louisiana, Nevada, Mexico and the Caribbean. As of December 31, 2006, Ted provided service from United’s hubs to 11 destinations in the U.S., including its territories, and four in Mexico.
United Cargo: United Cargo offers both domestic and international shipping through various services, including United Small Package Delivery, EXP (Express), and GEN (General) cargo services.
United Services: United Services is a global airline support business offering customers solutions for their aircraft maintenance, repair and overhaul (MRO), aircraft ground handling and flight crew training. United Services serves approximately 140 airline customers worldwide.
Alliances: As of February 1, 2007, Star Alliance carriers serves approximately 800 destinations in approximately 150 countries with approximately 14,000 average daily flights. Star Alliance partners, in addition to United, are Air Canada, Air New Zealand, All Nippon Airways, Asiana, the Austrian Airlines Group, bmi, LOT Polish Airlines, Lufthansa, SAS, Singapore Airways, South African Airways, Spanair, Swiss, TAP Portugal, Thai International Airways and U.S. Airways.
In 2006, Star Alliance accepted the applications of Air China, Shanghai Airlines and Turkish Airlines to join the alliance. United also has independent marketing agreements with other air carriers, including Air China, Aloha, Gulfstream International, Great Lakes Airlines, TACA Group, Island Air, Shanghai Airlines and Virgin Blue.
Mileage Plus: Mileage Plus builds customer loyalty by offering awards and services to frequent travelers. Mileage Plus members can earn mileage credit for flights on United, United Express, Ted, members of the Star Alliance, and certain other airlines that participate in the program. Miles also can be earned by purchasing the goods and services of its non-airline partners, such as hotels, car rental companies, and credit card issuers.
UAL Loyalty Services, LLC: ULS operates substantially United-branded travel distribution and customer loyalty e-commerce activities, such as united.com. In addition, ULS owns and operates Mileage Plus, being responsible for member relationships, communications and account management; and United is responsible for other aspects of Mileage Plus, including elite membership programs, such as Global Services, Premier, Premier Executive and Premier Executive 1K, and the establishment of mileage redemption programs and airline-related customer loyalty recognition policies. United is also responsible for managing relationships with its Mileage Plus airline partners, and ULS manages relationships with non-airline business partners, such as the Mileage Plus Visa Card, hotels, car rental companies and dining programs, among others.
Distribution Channels: The majority of United’s airline seat inventory continues to be distributed through the traditional channels of travel agencies and GDS, such as Sabre and Galileo.
Competition
The company’s competitors include Southwest Airlines, JetBlue Airways, U.S. Airways, Northwest, and Delta.
History
UAL Corporation was founded in 1934.
